EL SEGUNDO, Calif. -- Despite the shock of terrorist attacks in the U.S. last month and uncertainty about economic conditions, a fourth-quarter recovery in electronics components and semiconductors is still expected by analysts at iSuppli Corp. here.
The research firm today predicted a "slow and jerky recovery" will begin in the final three months of 2001, with an overall Q4 sequential growth in revenues of about 5% in the combined markets for chips, passive components and other electronics building blocks.
"The electronics components market recovery begins in the fourth quarter after sequential revenue declines of 19.9%, 12.1% and 4.3% for the first three quarters of 2001," said Gary Grandbois, principal analyst at iSuppli and author of the company's new Electronics Components Forecast Update. "The last three months of 2001 will bring some growth, the first time since the third quarter of 2000 the market has experienced a sequential rise.
"For the year, component sales will still fall 23.3% to $350 billion," he added.
The iSuppli report deals with all types of electronics components, including semiconductors, passives, connectors, printed-circuit boards, and other electromechnical devices.
"Virtually all sectors of the electronic components market will see a small up-tick in the fourth quarter of 2001," Grandbois predicted. "Look for the hard-hit passive market to jump the most with an 11.5% revenue gain. Display revenues will also rise a respectable 7.7% for the quarter, but all other segments will struggle to best 3% growth," he said comparing Q4 revenue projections against Q3.
But the industry will continue to suffer sluggish growth next year, according to the El Segundo research firm. Grandbois said the combine electronics components market will rise just 6.2% in 2002 with revenues reaching $371 billion. "Although most of the excess inventory of components has been worked off, overall economic conditions are stalling the return of a strong long term rebound," he said. " So little of the momentum from the fourth quarter up-tick in revenues will be carried into the first quarter of 2002."